T O P

  • By -

lolercoptercrash

So Google paying to be the default search engine for iOS is 1/4 of Apples profit?


IncomeStatementGuy

How much are they paying per quarter or year?


lolercoptercrash

20b a year , news today


AdvancedPhoenix

Okay so you didn't read that from the chart right? I was becoming crazy lol


TituspulloXIII

So how are you getting 1/4 of Apples profit? 20b a year = 5b a quarter. 5/24 = 21% (would be been closer to say 1/5) Or since they take tax out of it, go with the operating revenue of 28b which is going to tet you closer to 1/6


DuckDatum

1/6 is still insane. Every year, Google invests into Apple and producing about 1/6 their total profit. Holy shmoley.


TituspulloXIII

Seems huge, but with how many apple products are in the U.S. + world, I wonder what the ROI is on that investment for google being the default search.


DuckDatum

I’m sure the ROI is massive. I mean, can you even imagine the conversation execs were having when this deal was in the talks? If Google were to just change their mind for any reason, which I’m doubtful they would, that’d be a missive hit to Apple. I wonder if the deal includes provisions that state Google can’t just change their mind so easily.


MrEvilFox

What would happen to Google if Apple switched to Bing on all its iOS devices? Probably just as bad if not worse for them.


DuckDatum

I don’t believe Apple would do that to their users though. Best I could see is removing the default, forcing users to pick, and offering description of the pros and cons of each to offset existing biases and make Google look more equal to the rest.


MrEvilFox

If Google was to turn their back on the deal and Microsoft offered them a similar amount of money they’d push iOS update the following week and switch everyone to Bing IMHO. You can already go and change your default search, vast majority of people don’t bother.


Eccentricc

Because Google main product is their search engine. IPhones are a large chunk of the market. Make sense. Very expense but someone did the math


repeatrep

even more importantly iPhones have a deathgrip on the US market, the most valuable advertising market.


Goodnametaken

I will never understand why people want an iPhone over an android.


Sengiel

I have used many android phones and currently on my 3rd iphone, here is why I prefer iphone over android; I like iOS way more than android as os and where android shines in customizability it holds no value to me. Better in app cameras. Overall iPhone has been far more reliable for me and has aged better. Better design. My iPhones have also been cheaper than my flagship androids (never bought newest iPhones). So personal preference and better experience with iPhones tilts it for me


spellbadgrammargood

Facetime, iMessage, comparably good products (people forget its Apple devices vs. the world (Samsung, Google, Sony, etc.)) i would say iOS is more beginner-user friendly than Andriod


burajin

let's move on from which cool billion dollar company has the coolest metal box?


Ambiwlans

I wouldn't care if Apple weren't radically anti consumer, actively working to make products worse for everyone with their BS lockins, walled garden integration, anti-standard, anti-competitive crap.


Goodnametaken

Honestly I don't think about it that much. This is probably the only time I've ever commented about smart phones like this before. But I do think it's weird that Americans clamor to pay three times as much for an obviously inferior product. It's just strange to me. Marketing is a helluva drug.


repeatrep

most consumers really don’t care if the product is inferior. i used an iPhone before, why would i regress to fingerprint unlocks again? i used an iPhone before, im familiar with the OS, don’t wanna take time to learn a new one. i used an iPhone before, why would i switch? smartphones really don’t have a competitive edge over each other anymore. As long as you have a big screen (check) and a good battery life (check), the rest is just down to whatever the person is most familiar with. pricing is another thing, but alas ever tried buying an old person a phone? my grandma went from a LG flip phone to a LG smartphone simply because “LG is the one i use”


Prestigious_Stage699

No, Google's main product is it's advertising platform and user data. 


LazerEyesVR

This chart is quarterly


BendersDafodil

The question is: how much revenues and income does Google generate from this deal on Apple products?


considerthis8

What’s Apple’s development cost of maintaining compatibility to google search though? I imagine they want the best user experience


lolercoptercrash

Apple wants the best profit experience


probablywrongbutmeh

User experience and profit are very highly correlated


im_juice_lee

I honestly wish it was true, but you'd be surprised how much money some hot trash can rake in--esp on the enterprise side


im_juice_lee

> development cost of maintaining compatibility to google search For something just being the default option to a feature they will offer regardless, I'm going to say less than $20B


considerthis8

Apple is guaranteeing an insane amount of traffic to google with a deal like this. There are competitors that would offer money for this deal if google didnt


braxxleigh_johnson

Interesting, so iPhone revenue is more than twice the revenue from all other products, combined.


SamFish3r

24B from services is actually quiet impressive. This is the segment Apple has done a good job growing / maintaining.


Quintasoarus

What services does this encompass? Apple music and iCloud are the only paid services I can think of, I didn't think they were *that* big.


Frikki00

30% of every single paid app on the appstore and the same for all in app subscriptions and microtransactions


Quintasoarus

Ahh that makes more sense. Another comment mentioned appletv so all of that combined seems more like it would add up to 24B.


ZumayaWellness

I'd hazard a guess that app microtransactions utterly dwarf apple tv subs revenue


gordonmessmer

Which means that it costs them $6B to run the infrastructure for the App Store and to review the behavior of applications to ensure they aren't malicious, and they charge developers 4x what it costs them to operate that service.


MasterUnlimited

Apple TV as well.


AbsurdThings

Apple Arcade and Fitness+ too, but as mentioned elsewhere, App Store revenue is probably the bulk


Ambiwlans

Their latest laptops effectively destroy your data such that is irrecoverable if the machine is damaged but they offer an online backup service to protect your data from this. Edit: lol at apple fanboys downvoting this


Utoko

I am more suprised that Airpods + apple watch generate already more than MacBooks.


MrPogoUK

I guess people don’t tend to openly carry their MacBooks around much so I have no idea how popular they are, but I certainly see an awful lot of Apple watches and AirPods every day.


ZumayaWellness

Also tbf, mac laptops range from $1,000 to $2,500 (*base* models, specced up approaches 5 figures). So this implies they're selling 3-10x fewer laptops


Actionbinder

AirPods and Apple Watches don’t last half as long as MacBooks. People keep MacBooks for 5, 8 or even 10 years. Most people only keep AirPods for 2/3 years.


wronglyzorro

Just replaced my 2013 mbp. Old one is still going strong, but no longer met my needs performance wise.


Bar50cal

I believe iphone includes the app store and icloud. Its not just phone sales


UncleRhino

app store is under services


Habsburgy

And yet it's tanking. Maybe they are finally too expensive?


Utoko

Nope there is just no need anymore to buy all 1-2 years a new iPhone, the average user can't even spot the difference anymore when a new model comes out.


Doctor_Correct

I see these income statements all the time, and I still don’t know, what expense is paying employees in this chart?


AphoticFlash

I like how you asked this question, got three answers from three different people, and they're all totally different. Which is extra impressive because it covers almost every possible choice, 3/4 since it obviously isn't Tax.


ninian947

SG&A includes wages in the A for administrative


FightOnForUsc

It’s also in R&D


Spirited-Pause

Software/hardware engineers would fall under R&D i imagine.


sluttycupcakes

The way the expenses are categorized is based on function rather than nature. Wages would be built into product costs (direct wages to build and transport any products, although I believe this is mostly outsourced), service costs (service technicians etc), R&D (researchers, engineers), and SG&A (administrative positions, management, etc).


Team-_-dank

It's buried in sg&a, r&d, and cost of sales/cost of goods sold


Bewaretheicespiders

Its in the detail of Cost of Revenue (for the workers) and Operating Expenses (management and future product development). Of course there is more in Cost of Revenue than just salaries because the phones are mostly made by subcontractors.


mrkitzero

I'm not sure why but as a finance person using a Sankey chart with the profit at the top is irritating. If you flipped the right side I'd be fine with it.


Dal90

"So what is the company's bottom line?" "That's the profit -- at the top."


Skitt98

Maybe I'm Naïve in how tax works for large companies. But how come the tax is around 17% of their profit?


DollarSignInFront

corporate tax rate is 20%. they probably have misc tax credits to bring their effective rate down.


InsCPA

These are GAAP financials. GAAP tax expense is not representative of actual taxes owed/paid for a given year.


zoomeyzoey

Should be way more but capitalism


probablywrongbutmeh

Why should it be more? They pay corporate taxes at 17%, then owners of the company stock pay at least 15% dividend taxes on profits distributed. Therefore owners are paying a 32% effective tax. Not to mention they employ over 160,000 employees who they pay salary and payroll taxes for, they cover health insurance at a massively subsidized rate, not to mention the other various taxes they pay like property taxes, gas tax for transporting goods, etc. What % should they be paying in your view if 32% isnt enough?


yes_its_him

They are not paying 32% taxes. They don't distribute all of those profits. Their taxes are also less than 15% at $4B on $28B profits.


probablywrongbutmeh

You're right, if AAPL is paying 15% in taxes, a wealthy taxpayer who owns AAPL and earns 583k or more per year is paying a 20% rate on dividends which is higher than the 15% I quoted, so even if AAPL is paying 15%, a shareowner is paying 30-35%. And profits cant all be distributed because if they were the company would have no buffer for a bad year or expansion. Its a big reason why most small businesses fail, they dont retain enough enough profits to continue to expand or support themselves should they have a bad year. I still dont know why people find profits to be obscene, its perfectly reasonable and respectable for someone to say "I dont know enough about economics or business to have an informed opinion".


yes_its_him

Now do someone making earned income in the top bracket with state taxes. Or even someone making just under the FICA limit. In any event, conflating corporate tax and personal income tax is silly. They are not the same thing or on the same money and can't be combined that way. A lot of those dividends aren't taxed at all since they may be in e.g. Roth accounts, or held be people who pay much less than 15% tax rate.


probablywrongbutmeh

They are though, the owners of the company are paying tax on profits that were already taxed at the corporate level. Itd be vastly more efficient just to tax individuals instead. Or to use excise sales taxes on goods we believe are luxuries, which is a form of progressive taxation, or to reduce estate tax exemptions and curtail the use of trusts. Or to tax capital gains at a higher rate, or remove the step up of cost basis. Corporate taxes are possibly the least efficient method of taxation, because they are both easy to avoid and easy to make up for via higher prices.


yes_its_him

If you have to make your case by making false claims about taxes and overlooking my accurate points, then you don't warrant a seat at this table On the plus side, your user name checks out


probablywrongbutmeh

What false claims am I making? To be fair, I dont wish to sit at the kids table using a booster seat, so feel free to sit with the other children


yes_its_him

I explained that not all owners pay dividen taxes. Plus not all profits are distributed You are just full of shit basically.


OhNoTokyo

Simple. The answer is always: 1. Look at the tax that they pay, no matter what it is. 2. Consider that number a travesty of capitalism and demand they pay more. As long as they are making a profit, they are paying too little tax. And if they aren't making a profit, it is the fault of the executives.


probablywrongbutmeh

"We have demands!" "OK, what are they?" "Yes"


DuckDatum

They pay payroll taxes for different reasons entirely. Good on them for paying that, but the argument is that the tax on profit should be higher. It doesn’t make any sense to just start naming a bunch of taxes and act like the more tax categories they pay in, the more taxes they pay relative to anyone else or what’s arguably ethical. The rest stands with me. I’m not sure what should be considered fair for profit- is 32% enough? How do you determine that?


DuckDatum

They pay payroll taxes for different reasons entirely. Good on them for paying that, but the argument is that the tax on profit should be higher. It doesn’t make any sense to just start naming a bunch of taxes and act like the more tax categories they pay in, the more taxes they pay relative to anyone else or what’s arguably ethical. The rest stands with me. I’m not sure what should be considered fair for profit- is 32% enough? How do you determine that? Where does profit even go, is that after paying everyone their salaries and bonuses? So, it just goes to upgraded equipment and whatnot, or is that also considered an expense and doesn’t come out of profit? Depending on what profit *actually is*, I may be inclined to say yeah- it should be up there at like 90% tax for these mega corps.


spidd124

Because they rely on government funded infrastructure? I dont imagine so in Apple's specific case but many companies use government assistance to justify mininimum wage workers. More tax money in the system means more investment in areas, rather than being used purely for the next Board member's Yatch fund. And going after a dozen companies raking in Billions in pure after everything profits means you can relax the tax burden on everyday people? Those who can give more should give more.


ValyrianJedi

Everyone relies on government funded infrastructure


somaybemaybenot

Is revenue from Apple Pay under services?


xfreesx

Wouldn't this be Q1 and not Q2? Q2 usually runs april - june, this is until March 31st


Kermitnirmit

Apple’s fiscal year is aligned differently


Leafsfanheretolearn

How come they only pay 4B in tax on 28B in operating profit?


PirateINDUSTRY

Have I ever told you the story of the Irish/Caribbean off-shore patents and their licensing agreement to themselves?


seriouslyfun95

I wonder how fines & penalties levied on Apple are categorised? Is it part of cost of revenue? Is it put under tax? Its not significant enough to be a category on its own, but would be fun to see the tax and profit treatment of that money.


yes_its_him

Not very much taxes there for that much profit.


EmmEnnEff

This doesn't explain anything, because it puts all the revenues and expenses into an information-losing blender. Because it doesn't break out margins on each of the revenue streams. Services brings in $24B, but what's the OPEX for them? What's the cost of revenue? How does it compare to MacBooks? Does Apple even make a profit on iPads? How much profit?


sankeyart

Source: Apple investor relations Tool: SankeyArt [Sankey diagram generator](http://sankeyart.com/) & illustrator


USPS_Nerd

MacBook should instead be labeled “Macs”


MasonTheDuke

People here don’t understand how taxes work apparently


Modna

So... a company making nearly $100 billion in a year only pays 5% tax? Fuck me


DeMayon

What no? They pay about 14% of profit in tax. That 5% is growth YoY


Modna

4 billion out of 91 billion revenue. Do they only pay on profit, not overall revenue?


2dozen22s

That's how taxes work? You only pay tax on the money you actually make (Otherwise low margin high volume industries would pay more in tax than total profit and thus cease to exist)


Modna

Huh well learned something today. Would be nice if that’s how my taxes worked.. But shit - I’d fucking love to only pay 14% tax. That’s still ridiculously low.


icoibyy

Wow 24 BILLION. Thats sick.


Big_Forever5759

And tim announced a $110 billion stock buyback. I can see that it could be more useful to pay more taxes and spend more on r&d. Having only the Vision Pro as the only new product and being dud. Jumping around making a vehicle. Tim surly is the go to guy to keep a boat steady while Jobs was the risk taker.


Hotsauced3

Am I missing it or where is the revenue from the apple store? Curious how much that is.


jiwidi

So for 28b profits only 4b taxes and here I am paying much higher %


green_new_dealers

Why does one of the largest corporation in the country have a lower tax rate as a percent of their income/profit than the average person?


stumpyturk

Own the stock, don't own the phone.


DChenEX1

It'd make sense for you to buy the phone if you have stock in it. But it's definitely just a drop in the bucket.


Bright_Lie_9262

Still trying to make sense of the fact that they’re only paying 10% tax on gross profits while being headquartered in California.


atred

How much do they make on dongles?


tapakip

Maybe I'm missing it, but where do $110B in stock buybacks figure into this?


never-ever-post

That’s not part of their quarterly income statement. They are simply spending $110B of their profits from their coffers to buy back stock


RealFrog

Companies which do stock buybacks have run out of ideas. $8 billion for R&D is a pittance compared to what [Apple has pissed away on kiting its stock price](https://www.fastcompany.com/91118042/apple-stock-share-buyback-largest-us-history-meaning): > Back in 2018, Apple initiated a share buyback for $100 billion—a record that held until now. >But between then and now, Apple also initiated five other share buybacks: $75 billion in 2019, $50 billion in 2020, $90 billion in 2021, $90 billion in 2022, and $90 billion in 2023. Including this year, that's about $600 billion of cash gone up in smoke. No wonder their recent products are lackluster. $8 billion in research per quarter is dwarfed by the bonfire of the equities at over $20 billion per quarter. Want to know why Boeing has a tough time coming up with new aircraft? Look no further than the [$60 billion they torched in buybacks at the same time they decided on the 737Max](https://www.commondreams.org/opinion/boeing-safety-stock-buybacks). Microsoft isn't much better, and Meta is about the same. Stock buybacks were considered market manipulation until Ronald Reagan's administration, always a fount of terrible ideas, legalized them in 1982. By sheer coincidence (/s), the decoupling between productivity and wages started right around then: keeping wages down produces more cash for the investor class.


FightOnForUsc

They’re just a different form of dividends that aren’t taxed now but at sale. It wouldn’t make any difference in profit motive. Dividends have been around forever


tapakip

That's what I can't figure. They have $24B in profit on this chart. Even with a bigger Q1 profit, they're basically spending every dollar of profit on stock buy backs?


never-ever-post

They have been earning 24B/quarter for 10+ years. The profits just stay in Apple’s bank and once they accrue enough they do buybacks.


Aspiring__Writer

Apple has a lot of cash on their balance sheet.


Arquill

What's not to understand? When you take your paycheck, you spend some of your money on necessary expenses like rent and food, and then you save (invest) the rest of it. What else should they do with this money? This profit figure *already* accounts for their R&D expenses, manufacturing costs, cost of materials, logistics, advertising, etc.


tapakip

So your conjecture is that it's traditional and expected that companies spend 100% of every profit dollar in stock buybacks?  And to ask otherwise is heresy? Believe it or not, once upon a time, companies cared more than just about keeping up their stock price.  


Arquill

Well I'd say it's not unexpected. Their R&D expenses have increased yoy, so they have reinvested some of their profits into increasing R&D. Again, the profit figure you're looking at is already after all expenses have been figured. So I ask you again, what else should they do with that money? Do you think they should dump even more into R&D? But you can't just throw an extra $20 billion in R&D money at your engineering department - it takes time to ramp that up. Infrastructure and headcount can't materialize out of no where. And if they went on a big irresponsible expansion spree, then when the bust comes they'd lay people off and people like you would be saying "They should have planned their resources better!"


fu2nexus6

I hope to live long enough to see the demise of the apple company.


stumpyturk

What most bothers you about the co.? Mine is the attitude of the employees.


fu2nexus6

Mafia Tactics Extortion Intimidation Coercive control to ensure customer loyalty We look at you apple shills like you look at the southern Italians and wonder why they let the mafia do that to them.


stumpyturk

I can crack open a PC and replace parts. I want it's went into an Apple store with my son's MacBook. I asked that guy behind the counter to open it up so I could see how it was laid out. He said it needed a new power supply. I asked, can I buy one from you? He looked at me, and screwed the thing closed with his proprietary screwdriver, and sniped at me"we don't sell parts." And pushed it back at me with the glare.


TheBolshe

And yet none of those came in a fluffier


jujernigan1

It would be great to see this presented over the previous quarter or fiscal year. Doesn’t really say anything useful tbh.


[deleted]

[удалено]


[deleted]

[удалено]


[deleted]

[удалено]


Huge_Plenty4818

>I was going off gross because the average person doesn’t get to deduct their cost of living before paying taxes If you wanted to do that then shouldnt it be done on revenue not gross profit? But anyways, businesses are abstractions. At the end of the day every dollar earned by apple will go into the pocket of some individual, and that individual wont be able to deduct their personal living expenses from those earnings. However, every person is able to deduct expenses that are incurred as a result of engaging in commerce. > They usually are around 15% and certainly aren’t taxed at 30% annually. Regardless of the minutiae 14% still seems very low but that is apparently an unpopular opinion. Lets imagine apple makes $100. If they pay 14% tax so they are left with $86. They give that $86 to Tim Cook as a dividend. Tim now pays 15% on that so he is left with $73.10, so overall tax rate is 27%


BRI4NK

You do realize that they sell products outside of US too!?


[deleted]

[удалено]


FightOnForUsc

Their tax rate is 14% according to the chart? 4/28 = .1428 But also all of their employees pay tax, all of their products generate sales tax or VAT in places that have it, they also pay property tax.


bwainfweeze

All of their vendors pay taxes. Their employees pay taxes. The vendors pay SS taxes *for* the employees..


iStryker

Wow cool same shit visual over and over again good job man well done


Stlouisken

One quarter (Q2) and their profit is $24 billion. That is obscene. As a former Apple stock holder, I hated that they hoarded their money instead of paying a decent dividend. Sure, you’d get a special one-time dividend but those are rare. Instead they use the hoard to buy back shares, which doesn’t really help individual shareholders. It really helps insiders/executives by “manipulating” price-per-share metrics, which is what many executives have their bonuses tied to. Disgraceful.


Gage7heBoss

Share buybacks absolutely help individual shareholders. Market cap is based on outstanding shares, and by lowering that number it drives the share price up. You’re just seeing growth from share price rather than a dividend. Additionally, share buybacks are not something that the consumer tends to price in. Dividends are really hard to lower without completely destroying consumer confidence.


Ivegotworms1

Lol what. The benefit is you see appreciation in your equity rather than having to pay taxes on a dividend.


Stlouisken

What do you think you’ll pay taxes on when you sell? Having a paper profit is worthless unless you sell. At least dividends I receive monthly or quarterly and only pay 15% tax. Much lower than if you have a short term gain (40%)


Ivegotworms1

Have you ever heard of a 401k? It's the same idea. Let your money compound without paying taxes until you have to sell. It's a big difference over a long horizon.


Charming_Proof_4357

So Apple Pays a 4% tax rate and most of us mere humans pay 20-25% ?


Psychological-Ice361

The tax is rate 14.3% since corporations are taxed on profit not revenue. Wouldn’t make a lot of sense to tax corporations on revenue.


Aress135

Don't you have a VAT tax in the USA? Also, in Europe in most countries large corporates do pay 1-3% of revenue in many countries as some additional tax.


Psychological-Ice361

VAT or Sales Tax is paid by the consumer. Corporations will collect it and pass it on to the government, but would not be included in earnings reports. As far as I am aware, there is no hidden 1-3% revenue tax.


Aress135

Still,however I look at this it's just crazy. Over 25% of the total revenue ended up as profit. In Europe you will very rarely see number above 10%, 5-8% is kind of more the norm. Apple definitely looks like it is in need of a huge tax increase or some other measures. Do they pay fair wages?


Psychological-Ice361

Apple exists in Europe as well, and these figures include sales in Europe. I think Apple is an outlier no matter where you’re from. Does Apple pay a fair wage? They get their hardware made in Chinese sweatshops, so probably not


Aress135

Well they are ridiculously overpriced that it shows that brainwashing through marketing works well that's probably one reason. But to answer you, I checked in my country, I found 2 companies that are related to Apple here in the registry, they had a 17% percent rate as profit of total revenue so still high indeed, but lower then the graph


[deleted]

[удалено]


Psychological-Ice361

It doesn’t list the tax rate on the chart, it gives the difference for each category year over year. For tax, they paid 5% more tax in Q2 of 2024 than Q2 of 2023.


BrotherRoga

Yeah I could see that tax rate being quadrupled and still making a lot of money.


[deleted]

The dongle hell ? Where is that stat?


JoshinIN

Isn't the real answer by paying cents per day to slaves in other countries to make their goods which they resell for ridiculous markup? Pretty much the same business model as Nike.


PresentMammoth5188

Quick answer: corrupted motives & attempts at monopolizing 🙃 Also the colors chosen are quite ironic


TheChadmania

Q2 isn’t done yet, this is Q1


harambe_nation

Company FY (fiscal year) and CY (calendar year) are often different


paddySayWhat

Ok, person who doesn't know how company earnings work.


bwainfweeze

Are we gonna dick wave about who knows how earnings work? Apple is a consumer electronics company. They realize the plurality of their annual profits in Q1.